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Answers to Commonly Asked Questions About A Public Health Insurance System For Connecticut Bill No. 7030 By John R. Battista, M.D. and Justine A. McCabe, Ph.D. Co-Authors of Substitute House Bill Number 7030
Answers
Why do advocates of a public health insurance system describe out current health care system as inherently ineffective, inefficient, and immoral, as well as inferior to the public health care systems of other industrialized countries? Ineffective-Although the United States spends the most of any country per capita, although we have the best trained health care givers, and the most sophisticated and extensive medical infrastructure of any health care system in the world, we rank 23rdh in infant mortality, and 20th and 21st in life expectancy among males and females respectively, out of 29 industrialized nations. When the United States is compared to all nations we rank between 50th and 100th in immunizations, depending of the immunization you consider. These poor health care statistics are the result of the fact that the United States does not insure access to health care as a right of citizenship unlike every other industrialized country. Inefficient- The United States and Germany are the only two industrialized countries of the world to use a multipayer system, in which health care is delivered through a mix of public, employer and private systems. As a result, the United States and Germany spend between 50 and 100% more on administration of health care than publicly financed systems. The number of administrators in the United States has increased by 2000% in the past twenty five years. Increasing administrative costs are the main cause of the rising costs of our health care system relative to other industrialized countries. To make matters worse, the rapidly growing for-profit HMO system is the least efficient dimension of our health care system. For-profits spend 20 to 30% of health care premiums on administering the health care system. This is the same amount they spend on all payments to all health care givers. The for-profit sector of our multi-payer system is so administratively inefficient for four reasons. First, they have high salaries, at least for their CEO's. The CEO's of the medical insurance industry have the highest average pay of any industry in the world. Second they have extensive marketing expenses and enrollment costs. Third, they have great expenses in enrolling providers, communicating to providers their ever-changing plans, and recertifying that the providers are up to date on their malpractice insurance, state licenses, federal licenses, hospital privileges, and the like. Fourth they are involved in the extremely expensive venture of micro-managing the care of every individual that seeks medical benefits from their insurance. Medicare spends 3% on administration. The difference in these administrative percentages is the main reason that a public health insurance system can provide more health care for less money. Immoral-Dr. Martin Luther King said "Of all the inequalities in the world. The lack of access to health care is the worst" By making access to health care contingent upon ability to pay, our health care system is inherently immoral. Because money is the factor that determines access, and because our society is economically stratified by race, our health care system is defacto racist. African Americans have twice the rate of infant mortality of Caucasian Americans. Most people want health care to be a right of citizenship. To deprive our citizens of this right, we deprive them of their very life. This is fully immoral and must be stopped. The Connecticut Council of Bishops is on public record in support of universal health care. Inherent-The inefficiencies, ineffectiveness and inequality in our health care system is inherent to our multi-payer, limited access system. To make our system more equitable, whether it is to provide health insurance to a disadvantaged group, or whether it is to improve the quality of managed care, will cost more money. There is no way to fix our multi-payer system, already the most expensive in the world, without making it more expensive. (back to top)
How would a public, universal health insurance system resolve the problems associated with our current health care system? It resolves the problem of the 12% of our state population who are without health insurance, a group of predominantly working individuals and their families who have increased by 74% since 1990, by providing them with health care. It resolves the problem of the underinsured, the 25% of insured's who would be bankrupted by a major medical illness, by protecting them from medical bankruptcy, the number one cause of bankruptcy in the United States. It resolves the problem of the 35% of moderate income workers who are locked in unwanted jobs because they would lose their benefits if they leave their job, by providing them with the freedom to choose their work without worrying about losing their health care benefits. It resolves the problems of Medicare recipients who spend on average 35% of their incomes on health care, by providing them with affordable health care without out of pocket expenses. It resolves the problem of quality health care for those recipients of Title 19 who are given substandard medical care because the low reimbursement rates of Title 19 keeps the best health care givers from accepting it. By providing the same medical care reimbursement rates to all individuals, the quality of care for people currently insured through Title 19 will be greatly improved. It resolves the medical care access problems of the homeless by providing them with health insurance. It resolves the problems of small businesses in our state who have trouble paying for health insurance benefits for their employees by making health care more affordable and accessible. It would resolve the problems of all businesses with expensive workman's compensation medical expenses by lowering workman's compensation rates. Workman's compensation rates would decrease with this Bill because it takes away the need to adjudicate conflicts over whether a medical problem is job related or not, thus saving substantial amounts of money and time. Most importantly, it resolves the problems of managed care: the breach of patient confidentiality that comes from subjecting physician's treatment recommendations to insurance company pre-approval, the compromise of patient care that results from health care recommendations being managed to minimize costs, the disruption of the doctor-patient relationship that results from insurance companies having limited provider networks, and the frustration that many patients and health care providers experience in accessing and providing health care through the managed care system. It provides free choice of provider, it allows providers and patients the right to determine the most appropriate health care for them, it insures the continuity and confidentiality of care, and it makes it easy to access health care. (back to top)
Why do public health advocates claim that single payer, universal health care systems are the most effective, most efficient, most democratic, and most ethical health care system in the world? Most Effective- The health care statistics of universal health care systems are better than the health care statistics of limited access system because they provide health care to all citizens of the population they cover. Health care saves lives and improves health. In a limited access system only some people can access health care, and so these systems are less effective. This is the reason the United States ranks 23rd in infant mortality, and 20th in life expectancy, despite spending more per capita on health care, having the best trained health care givers, and the best medical infrastructure of any health care system in the world. Most Efficient- Single payer systems are more efficient than multi-payer systems because they are more administratively efficient. Multi-payer systems cost 50 to 100% more than single payer systems to administer. Additionally, because single payer, universal health care systems guarantee access to health care, illness tends to be prevented and treated early, when intervention is more effective and less costly. Democratic- Single payer systems provide for a dialog between the public insurer and consumers, health care providers, and health care organizations through advisory boards. This facilitates a democratic dialog between consumers advocating for increased benefits and decreased taxes, providers advocating for quality of care and increased rates of reimbursement, and hospitals advocating for improved facilities and improved staffing patterns. The cost of benefits, improved facilities, and reimbursement rates are clear and open to discussion under this system. This democratic dialogue is precluded by our current private system in which decisions are made autocratically by insurers without consultation with consumers or providers. These decisions are based on profit considerations, rather than concern for quality of care, the impact these decisions will have on the health care of consumers, or the economic well-being of health care givers. Ethical-Universal health care systems are the only ethical systems, because they are the only health care system that guarantees access to health care as a right of citizenship without consideration of income. All citizens of a country receive the same health care independent of age, income, sex, sexual preference, or health status. A single payer, universal health care system is ethical, moral, and consistent with the ideals of American culture. It is based on the ideal that health care, like education, is a right of all citizens under the law, regardless of income. We all share the risks and benefits of this system. We all have a vested interest in making it work, and making one another healthy. (back to top)
How could a single payer, universal health insurance system save billions of dollars a year in Connecticut while greatly extending health care benefits for the entire population of our state? Multiple prospective studies have shown that a public, single payer system would save billions of dollars a year in health expenses for every state in the United States. The State of Connecticut Office Of Health Care Access studied the impact of this public insurance system on Connecticut in 1992 and predicted this system would save over 2 billion dollars in total health care expenses in 1999 despite providing comprehensive health care benefits to the entire population. These comprehensive benefits include all medical care recommended by a licensed health care provider, all prescribed medications, all dental care, and the medical costs associated with long term health care. This finding was confirmed in the 1995 report of the Connecticut Office of Health Care Access, and was re-confirmed by a recent study of the Massachusetts Medical Society which showed savings of 1.7 to 2.7 billion dollars per year if this system were enacted in Massachusetts. Studies of a public health insurance system at the Federal level, conducted by the General Accounting Office and the Congressional Budget Office, both predict savings of 100 billion to 200 billion dollars if this system were to be enacted throughout the United States. How can this be done? First, and foremost, a single payer system reduces health care costs by reducing administrative costs. When the administrative costs of each aspect of our multi-payer system are averaged, we spend about 15% of the health care dollar on administration. Repeated studies have shown that a single payer system that would simply do billing would reduce these administrative costs to 3%, in line with Medicare. When you include educating the public about preventive health care, continually researching the system to improve it, and providing quality assurance functions, these administrative costs rise to about 8%, in line with the administrative costs of all the other single payer countries who spend between 8 and 10% on billing, research, quality assurance, and preventive health combined. The capacity of the single payer system to reduce administrative costs by about one half results from three basic sources: decreased insurer administrative costs, decreased hospital administrative costs, and decreased provider administrative costs. First, administrative costs to the insurer decrease from spreading out the cost of administrative systems over the entire state population, and minimizing re-enrollment costs. Furthermore, single-payer systems don't manage health care, saving money by eliminating this costly administrative function of our current system. The State of Connecticut Office of Health Care Access Commission report, "Pursuing Health Care Reform In Connecticut," predicted a 65% decrease in insurer administrative costs as a result of switching from our multipayer system to a single payer system. Second, administrative costs decline from having hospitals operate on a global budget instead of billing for each procedure for each patient. The State of Connecticut Office of Health Care Access Commission report predicted administrative savings of 14% for hospitals under a single payer system. Third, a single payer system reduces physician administrative costs. The simplicity of a single payer system, which frees physicians from the burden of pre-approval and the difficulties associated with literally thousands of insurance companies and plans, would reduce the administrative costs of physicians by about 26%, according to the report of the State of Connecticut Office of Health Care Access Commission. This would allow physician fees to be reduced while maintaining income. The second major way a single payer system reduces health care costs is by reducing the costs of purchasing medication and durable medical equipment, such as wheelchairs, crutches, and ventilators, through bulk purchasing. Costs for medications and durable medical equipment would be reduced in the neighborhood of 30 to 40%, bringing these costs in line with the smaller countries of the industrialized world, such as Finland, who use a single payer system. The third way a single payer system reduces health care costs is by coordinating and consolidating medical services and medical equipment. Under our current uncoordinated system, there is a great duplication of medical services. We have about 35% overcapacity in our health care industry, and some equipment such as mammography machines, have a 300% oversupply. Although this oversupply would keep Connecticut from having lines for health care services despite the 15% increase in demand for services that a single payer system would bring, Connecticut would still have a 20% surplus of medical infrastructure. This oversupply makes each procedure more expensive, by having to spread the cost of expensive equipment such as CAT Scanners and radiation oncology machines over a less than full capacity of procedures. By reducing this oversupply to 5 to 10% through coordinated planning, our health care system can be made more efficient without influencing access to health care. Thus there are five basic means of saving money under a single payer system: reducing administrative expenses to the insurer, reducing administrative expenses to hospitals, reducing administrative expenses to physicians, reducing the costs of purchasing medications and durable medical equipment, and the coordination and consolidation of medical services. These savings are large enough to decrease total health care expenditures despite covering all the uninsured and increasing benefits for the entire population, according to the 1995 report of the State of Connecticut Office of Health Care Access, "Health Care Reform In Connecticut: Analysis of Health Reform Options." Additionally, there are many savings under a single payer system that were not considered in these studies. First, because a single payer system would emphasize preventive health and encourage the early treatment of disease, health care costs would decline in the long run because illness would be prevented and treated early, when it is cheaper and more effective to treat. Second, health care givers would work with the insuring agency to find pragmatic ways of lowering costs while assuring quality, thereby cutting ineffective testing and treatments while saving money. Third, non-health insurance plans which have medical benefits attached to them, such as workman's compensation insurance, malpractice insurance and car insurance, would cost substantially less under a single payer system because conflicts over the cause of medical injury would no longer have to be adjudicated by expensive legal proceedings. Fourth, the State of Connecticut would experience administrative savings as a result of the consolidation of health care administrative functions that are spread out over a wide variety of departments and offices such as public health, social services, and the Office of Health Care Access. Finally, providing an equitable system of health care would promote a pro-social attitude and decrease crime. (back to top)
Why do you single payer advocates claim that is irrational to believe private insurance systems are more efficient than public insurance systems? Isn't it true that private managed care have controlled health care costs in our American health care system? Private, for profit insurers spend 20 to 30% of insurance premiums on administrative costs. Medicare spends 3%. Single payer systems spend 8 to 10% on administration, but that includes educating the public about preventive health care, researching the system, and providing quality assurance functions. Private, for-profit insurers are more expensive because they must market their programs, constantly enroll and reenroll members, manage care, and make a profit. All of these costs are eliminated in a single payer system. It is true that managed care systems tamed the inflation in American health care by reducing provider fees and reducing hospital stays. However, the costs of the American health care system continue to rise, both as a percentage of American GDP and in terms of cost per capita. In the period from 1990 to 1997 the percentage of cost of health care in the United States rose from 13.2 to 14.7 %. During the same period, the cost of health care in Canada remained the same at 9.5% of GDP without managed care. Single payer systems control costs better than managed care systems without the problems of the managed care system: breaches of patient confidentiality and continuity of care, and compromise of patient care. Thirty years ago when Canada enacted a public health care system both Canada and the United States spent the same percentage of their GDP on health care, 7.5%. Now thirty years later Canada spends 9.7 per cent of its GDP on health care and the United States spends 15% on health care, despite managing care for the majority of our citizens. (back to top)
Why do you believe this Bill would revitalize the Republican Party and be great for Governor Rowland? The Republican Party although lauded for being fiscally conservative, is chastised for being the hand-maiden of the wealthy and corporate elite, and insufficiently concerned for the well being of the poor, needy, and socially disadvantaged of our country. Single payer health care is both fiscally conservative and socially responsible. It is tax and save, instead of tax and spend. By utilizing taxation only in those areas of government which are more efficient than private business, the republican party will be shown to be fiscally conservative and socially responsible. This would revitalize the party by making it appealing to the both the fiscally conservative and socially concerned. Governor Rowland, by being the first Republican Governor to recognize the fiscally conservative and socially responsible nature of the public financing of health insurance, would establish himself as a national republican leader. If he supports and signs this Bill, which we would be pleased to rename the "Governor John G. Rowland Health Care Act," he would obtain a massive amount of public exposure, both because Connecticut would be the first state in the United States to pass a public, universal care health insurance system, and because Connecticut, being the insurance capitol of the world, is a particularly surprising state to pass such legislation. Furthermore, if this Bill is signed into law in Connecticut this year, we will write a Bill for next year, to declare the day he signs this Bill a Connecticut State Holiday. This would bring Governor Rowland further publicity and support. (back to top)
Why do single payer advocates claim that a publicly financed, and publicly administered system is not "socialized medicine?" Guaranteeing access to health care for all citizens is no more socialized than guaranteeing the right to education for all citizens. Under a single payer system, in which all providers would be paid the same amount for the same service, providers must compete with one another on the basis of quality and convenience of service. This is a return to a pure competitive model, a model which has been disrupted by our managed care system, in which patients are forced to see providers on an insurer's panel, and fees are set without provider input. A publicly financed health care insurance program is not a delivery system, which would be socialized medicine, it is only a payment system within the context of a competitive, free market. (back to top)
Isn't a public health insurance system a kind of Medicare for All? Wouldn't this system experience the kind of cost overruns that the Federal Government has experienced with Medicare? There is no rational basis for this belief. All evidence suggests single payer is the best way to control costs. The finest example of this is an inadvertent controlled study that has been carried out between Canada and the United States for the past thirty years. At the time of enactment of the Canadian Health Care Act the United States and Canada both had identical health care systems and spent exactly the same percentage of their gross national products on health care, 7.5%. In the ensuing years, Canada under a single payer system has increased its expenditures on health care to 9.7% of GNP while the United States under a multi-payer system has increased its expenditures on health care to about 15% of GNP. Similarly, among all the industrialized countries the two most expensive health care systems, the United States and Germany, are the only two countries with a multi-payer system. All of the other industrialized countries use single payer systems, and have lower per capita health care costs than the two multi-payer systems. Concerning Medicare. There is no relationship between single payer health insurance systems and the Federal Medicare program. Medicare is a prospective payment system in which you pay into the federal health care system for your working life in order to be covered after age 65. Costs under this system have run out of control due to increases in the life expectancy of our population and new technology. A single payer health insurance system is paid for year by year. Any failure to balance the budget in a particular year would lead to alterations of taxes, benefits or provider fees for the next. Decisions about the health care system are thus given year to year consideration in negotiations between the insurer, the public consumers and the health care providers. (back to top)
Wouldn't there be lines in Connecticut for medical services under this system, just as there are lines in Canada under their system? No. The Canadian health care system has lines for non-emergency services because they have sought to limit costs in their system by limiting diagnostic procedures and surgical interventions. This is a function of the fact that Canada is not as wealthy a country as the United States, and operates under a British model of medicine in which surgical intervention and diagnostic procedures are de-emphasized in favor of medical treatment. Lines would not occur in Connecticut because Connecticut has a 35% oversupply of surgeons and more than a 35% oversupply of diagnostic equipment. Demand on health care services will be increased by 15% under a public, universal health care system in Connecticut. This will leave a 20% oversupply in our medical care system. We will not have lines. (back to top)
Do you believe this system would be supported by the population of this state? Yes. National Polls taken by NBC, the LA Times, CBS, Gallop, Roper and the Associated Press conducted in 1989 and 1990 showed support for a tax-financed national health program to vary from a low of 62% to a high of 72%. A 1990 Hartford Courant poll of CT residents showed 60% in favor of a tax-financed health insurance program. Those percentages should be higher now due to the greatly increased dissatisfaction with our managed care system. (back to top)
Do you believe this system would be supported by the health care providers of this state? Yes. Health care providers are miserable under managed care, a system that increases their overhead and hassle, reduces their income, and takes decision making away from them. They will readily accept an unmanaged health care system with less administrative hassle as long as their overall income is not significantly reduced. In addition, health care professionals would be given a meaningful voice in determining fees, covered benefits, and quality care standards, something they are precluded from under managed care. Finally, they will have the opportunity to serve the entire population of CT without consideration of ability to pay. When the medical staff of New Milford Hospital was asked if they support this system they voted over 4 to 1 in favor of it. Preliminary discussions with the medical staff of Danbury Hospital showed considerable support for this system. Preliminary discussions with the Connecticut State Medical Society have shown an openness to this model. A recently published article in the New England Journal of Medicine showed the majority of academic physicians, residents and medical students support public health insurance systems for the United States, and favor this system three to one over private, managed care insurance systems. (back to top)
How would this Bill stop Connecticut from becoming a magnet for the sick and disabled from other states in the United States? This Bill would allow the state insurer to not allow health care benefits to be given to residents of Connecticut who can be shown to have moved to Connecticut to access health care. However, we do believe that Connecticut will experience an increase in its population under this system, because business will come to Connecticut because they will be able to save substantial amounts of money in their payments for health care under this system. This will be good for the state, and not hurt the health care system, because these newly employed workers will pay their fair share in our public health system. (back to top)
How would this Bill deal with the private insurance workers who would be displaced by a public system? The Bill puts aside 1% of the health care system's assets to retrain displaced private insurance workers for the first three years. Many of these workers would be employed by the Connecticut Health Care Trust which would administer the health care system in Connecticut. Many of the remaining displaced workers could be retrained as health care workers. Since the demand for health care will be increased by 15% under this system, there will be many openings for health care workers in Connecticut. This is a much fairer situation than the common one in the private insurance industry where insurance workers lose their jobs due to the consolidation of two health care insurance companies into one, without any concern given to their future well-being. (back to top)
How would a public health system deal with cost containment issues, quality of care issues and potential fraudulent billing of health care providers? Quality Assurance and fraud issues would be handled through a Quality Assurance Division of the Connecticut Health Care Trust. The Quality Assurance Division would work with a health care provider advisory board to determine pragmatic and cost-effective quality standards which it would use to educate providers. The system educates providers through quality of care standards, rather than managing individual cases. Fraud would be investigated through a system similar to Medicare. Providers whose patterns of care significantly differ from their colleagues in the state would be investigated to determine the basis for these discrepancies in their billing patterns, including fraud. Furthermore, consumers would receive copies of all billing done by their providers and be encouraged to report discrepancies between what the trust was billed for and what services their provider actually provided. (back to top)
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